Bad Credit Management and Firm Performance: Evidence from Nigerian Banking Sector
The study examined whether bad credit management affects firm performance. Ex-post facto research design was used in the study. Data was collection from secondary sources. The population for the study consisted of quoted deposit money banks in Nigerian Exchange Group (NSG) as at 31st December, 2020. The sampled size is 12 banks selected using filtering method to select banks that have consistently published annual reports from 2013 to 2020. The empirical results revealed that bad credit management had a significant negative effect on firm performance at 5% level of significance measured by ROA and 1% level of significance measured by ROE and NPM respectively while the control variable, size of the firm had a significant positive effect on firm performance at 1% level of significance measured by ROA, ROE and NPM respectively. The study recommended that money deposit bank managers should maintain reasonable liquidity management to cushion the effect of bad credit management which affects the performance of the banks. Keywords: Bad Credit Management, Firm Performance, Modern Portfolio Theory, Size of the Firm